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ContentsSome thoughts on paradigm shiftsRe-thinking the nature of transactions and transaction actorsProximity mobile payments: card emulation or not? 3 case studies from The Netherlands to validate consumer acceptance of NFCRebooting the conversation from a consumer point-of-viewWhat do we expect from a wallet, or a payment instrument?Is NFC a “tech-push’ or a “consumer pull’?How to differentiate with NFC?

So I was thinking about some of the old conceptions of “e-commerce” and the “e-wallet” that we used to have at Netscape and MCI (1994-1996), when we were first deploying HTTPS.

Major Dutch retailer Albert Heijn wanted to trial a new retail formula in their “To Go” storesNFC shelf-level tag shopping, as customer filled her basketCustomer built up a list of what they were buying, and performed self-checkout without queuing at busy store countersDiscounts and specials applied automaticallyReceipt can be printed upon existOccasional control checks to validate purchases

MNOs tend to generate their revenues from “transaction-based business” (sale of SMS, data, voice calls), whereas margins on actual “transactions” for banks are thinning in most markets, and in some cases unprofitable in general.For banks, the question about the value of payments services is a burning one these days – especially for developed world banks, but also for the developing world as well.Deposit-taking and lending are major differentiating business lines of banks, although some MNOs and other parties are starting to make moves in this direction.

The case is clear for our creativity to make virtualised ecosystems work.But it will take a lot more creativity, usability and value to become a real business driver.And for banks, they also need to achieve this without sacrificing trust, security, longer-term relationships, and (a certain degree of) transparency.

12.
But then again, if you were a merchant -
you could also just say you accept PayPal
too ..
But the per-transaction charges of moving
online payments to the supermarket point-
of-sale are usually prohibitive to retailers,
and PayPal wants to keep it’s margins
healthy too ..
Fully cardless payments, some people trying to figure out
“proximity payments” without an additional hardware element
HERE

16.
But PayPal Beacon and iBeacon aren’t really about the
“transaction” in the traditional sense. They focus on the
“customer journey” – and seek to address the next-
generation merchant’s priorities.

17.
Focusing on “transactions”
Transactions are the Channel
”I have a pipe and/or network and I want to monetise the
investments I made in creating it.”
”I want as much to get through that pipe and the (mobile)
phones accessing it as possible.”
Transactions via the Channel
”I have stuff I want to do via channels. Enable my consumers to
control their bank account, make a payment, get a ticket, see an
ad, save or use loyalty points, etc.”
”I need as many (cost effective) channels and pipes to do it.”

19.
 50% of consumers will pay more for products they trust
 78% of consumers will look first to trusted brands when
in need of products or services
 78% of consumers are willing to give trusted brands a
chance, even if unsure of what value the product or
service will bring to them
 82% of consumers will choose to use a trusted brand’s
products or services frequently, rather than move
between brands
 83% of consumers will recommend a trusted brand to
others, often un-prompted
Trust?
Concerto Marketing Group, Vancouver BC, Canada / Ontrack Advisory, Singapore (April 2013)

20.
What do we expect from a wallet?
 A place to store cash?
 A place to store payment
tokens?
 A place to store other tokens?
 A personal object?
 A private object?
 Something small enough to
be portable/mobile?
 … but … do we need a
physical object?

21.
Then, what do we expect from a transaction device?
 Identification of myself, my
rights and capabilities,
memberships.
 Identification of myself, an
authentication tool for
payment.
 Secure, multi-factor
 Tamper-resistant/evident
 Personal and private
 Easy to use
 … but … do we need a

22.
 Consumers seem to love and trust it
• But who will pay for it’s implementation … merchants, banks, mobile
operators, handset manufacturers?
 Given the “app revolution” in so many of our markets,
what value does NFC bring to payments?
• Convenience?
• Put all cards in one apparatus?
The phone-shaped wallet ..
• Addiction to mobile phones, but
not to our wallets?
• Leave cards at home?
• Add value to transactions?
The Consumer’s Perspective on NFC?

23.
 Cards seem to be entrenched in many markets, and are
likely to remain in play for the foreseeable future,
simply increasing the issuer and acquirer costs.
 But, is NFC is fundamentally different from previous
steps forward in functionality .. ?
The Consumer’s Perspective on NFC?
SMS Mobile Data
Apps
Online Shopping
& Payment

25.
 The case is clear for our creativity to make virtualised
ecosystems work.
 But it will take a lot more creativity, usability and value
to become a real business driver.
Virtualisation benefits are clear, from the business POV
..

28.
 Although item-level NFC/RFID tags are too expensive
right now. Maybe we can print them soon ..
 And you could do the same thing with image
recognition software presumably in the future ..
 And you could still (more easily?) pay with a card when
you get to the POS …
However ..